Vietnam port lift for China Merchants Holdings
Shares of container port operator China Merchants Holdings ( International ) jumped 12.1 percent Wednesday after it indicated it may invest in the parent's proposed US$1 billion (HK$7.8 billion) six-berth container port project in Vietnam.
The rise came a day after China Merchants Group, parent of the Hong Kong-listed unit, announced it has signed an agreement with Vietnam National Shipping Lines to build and operate its first overseas port near Ho Chi Minh City.
"This represents our first attempt to invest outside of China in a significant way," China Merchants Group president Fu Yu-ning said.
"Not only has Vietnam's economy been growing rapidly in the last decade, Vietnam stands to benefit from the on- going trends of globalization and out- sourcing behavior denoted in the conduct of world trade."
A source said China Merchants Holdings is interested in investing in the project, but gave no details about the size of the potential stake.
The subsidiary said in February that it plans to spend more than three billion yuan (HK$3.03 billion) to develop a four-berth port in Tianjin, near Beijing, after its parent signed a framework agreement with Tianjin Port Group to develop logistics, property and port facilities.
The proposed berths in Vietnam, at Ben Ding Sao Mai seaport -located in the province of Ba Ria-Vung Tau - is designed to accommodate six 100,000 tonnage container berths, along with storage depot space of at least two million square meters.
The mainland investment follows Vietnam's entry into the World Trade Organization last year.
"Export growth is expected to increase after [Vietnam's] WTO entry," said Credit Suisse analyst Karen Chan, adding that cargo would need to be handled by a modern terminal.
China is the largest importer of Vietnamese goods, while Vietnam is the mainland's fourth largest export customer. Sino-Vietnamese trade amounted to US$10 billion last year.
Tuesday's agreement also allows the cooperation to extend to other ports and ports-related activities, and projects in other industrial sectors such as shipping, logistics, properties, transport infrastructure and financial services.
China Merchants Holdings shares closed Wednesday at HK$37.45, gaining HK$4.05.
The rise came a day after China Merchants Group, parent of the Hong Kong-listed unit, announced it has signed an agreement with Vietnam National Shipping Lines to build and operate its first overseas port near Ho Chi Minh City.
"This represents our first attempt to invest outside of China in a significant way," China Merchants Group president Fu Yu-ning said.
"Not only has Vietnam's economy been growing rapidly in the last decade, Vietnam stands to benefit from the on- going trends of globalization and out- sourcing behavior denoted in the conduct of world trade."
A source said China Merchants Holdings is interested in investing in the project, but gave no details about the size of the potential stake.
The subsidiary said in February that it plans to spend more than three billion yuan (HK$3.03 billion) to develop a four-berth port in Tianjin, near Beijing, after its parent signed a framework agreement with Tianjin Port Group to develop logistics, property and port facilities.
The proposed berths in Vietnam, at Ben Ding Sao Mai seaport -located in the province of Ba Ria-Vung Tau - is designed to accommodate six 100,000 tonnage container berths, along with storage depot space of at least two million square meters.
The mainland investment follows Vietnam's entry into the World Trade Organization last year.
"Export growth is expected to increase after [Vietnam's] WTO entry," said Credit Suisse analyst Karen Chan, adding that cargo would need to be handled by a modern terminal.
China is the largest importer of Vietnamese goods, while Vietnam is the mainland's fourth largest export customer. Sino-Vietnamese trade amounted to US$10 billion last year.
Tuesday's agreement also allows the cooperation to extend to other ports and ports-related activities, and projects in other industrial sectors such as shipping, logistics, properties, transport infrastructure and financial services.
China Merchants Holdings shares closed Wednesday at HK$37.45, gaining HK$4.05.